So… Carib Cement has billions sitting in cash, and investors are asking one question. Where’s the dividend?

Carib Cement is trending again after Mayberry’s Chris Berry publicly raised concerns about how the company handles its profits and dividends.

Carib restarted dividend payments in 2022 after going 17 years without paying shareholders. But the company is only paying out about 30 percent of its profits while billions of dollars continue building up in an investment deposit account linked to its parent company overseas.

Carib Cement’s ownership structure has always been a bit complicated.

Carib Cement is owned by Trinidad Cement, which is in turn owned by Cemex. So Carib Cement pays money upward until it eventually reaches Cemex. 

But that makes the process less efficient for Cemex to pull money out through large dividend payments because every step in the chain affects how much cash actually reaches the top.

So instead, a lot of the extra cash is reportedly being parked in investment deposit accounts connected to the parent company structure overseas. 

So rather than paying out most of the profits directly to shareholders as dividends, the company keeps building up these deposits internally. That setup works better for the parent company financially.

But it’s starting to rub people the wrong way. Because if all that money were paid directly to shareholders, the dividend payout could be significantly larger than what investors are currently getting.  Taking Stock Analyst, David Rose, explains.

“It is based on the fact that the company is paying 30% of its net profits in the prior financial year in the subsequent period as a dividend, but is retaining a larger portion of that cash as an investment deposit with a related party, which is their ultimate parent company. If the company was to pay out that entire investment deposit amount to shareholders, that would be equivalent to about a $17.74 dividend per share,” he said.

And Carib Cement isn’t struggling for cash.  Far from it.

The company is still making strong money, generating healthy cash flow and benefiting from Jamaica’s construction boom and regional demand for cement.

But concerns like this can still affect the stock price because investor confidence matters.

And that’s the bottom line.